Ugro Capital Limited · NSE:UGROCAP
Ugro Capital — Q2 FY23 Earnings Presentation
44 slides from Ugro Capital's earnings presentation, Nov 11, 2022
Slide 1: UGRO Capital Limited Q2'23 / H1'23 Investor Presentation
UGRO Capital Limited Q2’23 / H1’23 Investor Presentation NSE: UGROCAP | BSE: 511742 Slide 1
Slide 2: Safe Harbor
Safe Harbor This presentation has been prepared by UGRO Capital Limited (the “Company”) solely for your information. By accessing this presentation, you are agreeing to be bound by the trailing restrictions. This presentation is for information purposes only and should not be deemed to constitute or
Slide 3: Key Highlights for Q2'FY23
Key Highlights for Q2’FY23 Slide 3
Slide 4: Key Highlights for Q2'FY23
Key Highlights for Q2’FY23 Asset Growth Profitability AUM – INR 4,375 Cr (+20% QoQ, +126% YoY) Net Total Income Gross Loans Originated/ Disbursed – 87.6 Cr (+24% QoQ) – INR 1,653 Cr (+22% QoQ) – 158.2 Cr H1’23 (+144% H1’22) 01 – INR 3,011 Cr H1’23 (+168% H1’22) Cost to Income ratio – 62.9% (72.1% in
Slide 5: About UGRO
About UGRO Catalyzing the future of credit access for MSMEs Slide 5
Slide 6: Data can be the engine for SME credit in India
It has been proven that data can be the engine for SME credit in India End to End MSME Digital Lending is now a reality Identity Tax and Legal Filing B2B e-Commerce Layer Apps Aadhar E KYC E Sign Embedded Credit Neo Banks Social Networks 50% + of Payments Accounting and MSME and Agri Tech Flow Based
Slide 7: India's First fully data driven Lending as a Service Company
India’s First fully data driven Lending as a Service (LaaS) Company Business Loan Public Sector – Secured Banks Liability / Co-lending Partners Micro and Small Business with Machinery Private Sector 1 L to 5 cr credit need Finance Banks Data Business Loan Multi Driven 10 Co-lending SFBs – Unsecured
Slide 8: Evolved to a Data Tech Company within 3 years of inception
Evolved to a Data Tech Company within 3 years of inception Technology Platforms Operations and Collections • Web & Mobile based • E-Sign Application, E- applications for each Agreement, Customer business channel WhatsApp bot, E-NACH integrating on one Data Analytics • Payment gateway integration + c
Slide 9: Revolutionizing credit to MSMEs through data driven underwriting
Revolutionizing credit to MSMEs through data driven underwriting 33,000+ Dec 2022 • Gro Score 3.0 Applications processed Gro Score 3.0 • One score combining Bureau, Banking & GST data since July 21 1,00,000+ Mar 2022 • 76% of prime branch book on boarded through Gro Score Proof of Concept • Analysis
Slide 10: Data driven proprietary scoring model powered by AI / ML Models
Data driven proprietary scoring model powered by AI / ML Models Ability to capture alternate data from banking and bureau… …to draw meaningful insights out of unorganized data... Artificial Intelligence GRO 2.0 GRO 3.0 Engineering of making Intelligent Credit Bureau Machines and Programs Credit Acro
Slide 11: GRO Score 2.0 – Analysis of accepts and rejects
GRO Score 2.0 – Analysis of accepts and rejects Portfolio Performance across time horizon 30+ DPD % in 6 months 90+ DPD % in 6 months Not Score Disbursed Write Disbursal Disbursed band count rate% Mix 9% 9% 4% 3% count 9% 9% 8% 3% 3% 3% 7% 8% 8% 3% 3% A 7,383 3,886 34.5% 49.6% 2% 5% 6% 5% 5% B 4,898
Slide 12: Deep analysis of Macro and Micro Economic Factors to develop sector focus
Deep analysis of Macro and Micro Economic Factors to develop sector focus A continuing process involving extensive study of macro and micro economic parameters carried out in conjunction with market experts like CRISIL Light Engineering Chemicals Auto Hospitality Components Micro Enterprises Educati
Slide 13: System Architecture to support full-Suite SME Lending
System Architecture to support full - Suite SME Lending Slide 13
Slide 14: Catering to all credit needs of all MSMEs
Catering to all credit needs of all MSMEs 23 Prime Branches Supply Chain Business Loans 75 Financing Secured by Property Micro Branches 1,000+ GRO Partners Unsecured Our Product New Age 80+ Business Loans Offering Products Anchors 40+ OEMs 30 Fintech Partners Machinery Micro Enterprises Loans Loans
Slide 15: Multi pronged approach led by tech capabilities
Multi pronged approach led by tech capabilities Prime Loan Branches Micro Loan Branches Branch-Led Channel Catering to MSMEs through 95+ branches Ticket Size ROI Ticket Size ROI • Prime Loan Branches : 23 branches with loans largely sourced LAP 50L-500L 12%-12.5% LAP 2L - 25L 18% - 23% through inter
Slide 16: Lending as a Service (L-a-a-S)
Lending as a Service (L-a-a-S) Slide 16
Slide 17: Building India's largest Co-Lending platform: Lending as a Service
Building India’s largest Co–Lending platform: Lending as a Service (L-a-a-S) Increasing Mix of off - Book AUM • Secured Business Loans • Agreement under new co-lending regulation – Jun’21 1% 2% 4% 7% 16% 21% 29% • Small Ticket Secured and Unsecured Business Loans • Agreement under new co-lending regu
Slide 18: Co-Lending is a value accretive model
Lending as a Service (L-a-a-S) Co-Lending is a value accretive model Example of 80:20 Co-Lending Partnership Model Customer ROI of 14.5% Benefits to Partner Benefits to UGRO (assumption) on INR 1 Lakh Institution Loan • Higher ROA & ROE on account of • Risk weight lower in case of Co- - Better lever
Slide 19: Lending as a Service is a highly profitable model
Lending as a Service (L-a-a-S) is a highly profitable model Sample Illustration Assumptions for Calculation Particulars (INR Cr) Normal Scenario Co-lending Model Particulars Ratios On Balance Sheet On Book – 20% Off Book – 80% Total Loan Amount 1,00,000 20,000 80,000 1,00,000 Yield 14.5% Equity Capi
Slide 20: Diversified Lender base and continued build-out of liability book
Diversified Lender base and continued build-out of liability book Total Debt (INR Cr) and No. of Active Lenders Cost of Borrowing Liability Mix 3% 37 50 55 63 67 5% 2,725 18% Count of Lenders 2,208 1,764 1,802 Total Debt 46% 10.5% 10.5% INR 2,725 Cr 10.2% 10.1% 10.3% 1,096 28% Q2 FY22 Q3 FY22 Q4 FY2
Slide 21: Roadmap to FY25
GRO Roadmap to FY25 Slide 21
Slide 22: Business Model Evolving to Generate Significant Cashflows
Business Model Evolving to Generate Significant Cashflows Q1FY23* Q2FY23* FY23P FY25P AUM (INR Cr) 3,656 4,375 7,000+ 20,000+ Off Book AUM % 21% 29% 35% 50% Net Total Income % 10.5% 11.4% 13.0% 15.0% Cost to Income Ratio % 72.1% 62.9% 60.0% 45.0% Credit Cost % 1.1% 1.7% 1.5% 1.5% PBT / Avg. TA 1.5%
Slide 23: Portfolio Performance
Portfolio Performance Slide 23
Slide 24: Well Diversified and Granular Portfolio
Well Diversified and Granular Portfolio Product Mix (AUM) Portfolio Concentration in key geographical areas Sector Mix* 16% 30% 9% 11% 17% 19% 24% 16% 4% 9% 3% 5% 6% 3% 29% 11% 16% 5% Prime - Secured Loans Prime - Unsecured Loans 5% 15% Micro Enterprise Loan Supply Chain Financing 20% Machinery Loan
Slide 25: Portfolio Provisioning, Collection Efficiency & Restructuring Highlights
Portfolio Provisioning, Collection Efficiency & Restructuring Highlights Overall Collection Efficiency Trend • Total provisions as of Sep’22 stood at ~ ₹59.1 Cr (1.4% of Total AUM) 94.3% 93.2% 93.3% 93.4% 92.8% 93.4% • GNPA / NNPA as a % Total AUM stood at 1.7% / 1.2% as of Sep’22 • Stage 3 provisio
Slide 26: Operating and Financial Performance
Operating and Financial Performance Slide 26
Slide 27: Operating & Financial Metrics
Operating & Financial Metrics AUM (INR Cr) Gross Loans Originated / Disbursed (INR Cr) Total Income (INR Cr) & Portfolio Yield$ 1,933 2,589 2,969 3,656 4,375 16.7% 17.3% 15.7% 16.0% 16.4% 1,653 157 4% 7% 16% 21% 29% 1,359 114 124 1,053 963 791 85 96% 93% 84% 63 79% 71% Q2'22 Q3'22 Q4'22 Q1'23 Q2'23
Slide 28: Finance | Income Statement & ROA Tree
Finance | Income Statement & ROA Tree Income Statement (₹ Cr) Q2 FY22 Q2FY23 Y-o-Y Q1FY23 Q-o-Q Key Ratios (Annualized) Q2FY22 Q1FY23 Q2FY23 Interest Income 55.1 116.2 111% 93.1 25% As a % of On Book AUM Income on Co-Lending / Direct Assignment 5.4 30.4 463% 22.6 35% Total Income 16.1% 18.7% 20.9% O
Slide 29: Finance | Income Statement & ROA Tree
Finance | Income Statement & ROA Tree Income Statement (₹ Cr) H1FY22 H1FY23 Y-o-Y FY22 Key Ratios (Annualized) H1FY22 H1FY23 Interest Income 104.8 209.3 100% 272.2 As a % of On Book AUM Income on Co-Lending / Direct Assignment 6.1 53.0 769% 28.5 Total Income 14.9% 20.0% Other Income 3.2 18.9 491% 12
Slide 30: Finance | Balance Sheet
Finance | Balance Sheet Balance Sheet (₹ Cr) Mar-22 Sep-22 Balance Sheet (₹ Cr) Mar-22 Sep-22 Financial Assets Financial liabilities Cash and Bank Balance 188 361 Trade payables 7 7 Loans 2,451 3,168 Borrowings Investments 69 66 — Debt securities 703 1,225 — Borrowings (other than debt securities) 1
Slide 31: Board and Management Team
Board and Management Team Slide 31
Slide 32: Institutionally owned: Majority held by institutional investors
Institutionally owned : Majority held by institutional investors Shareholding Pattern (Sep-22) Promoter Others 2.9% 16.2% 21.4% Individuals 15.7% 13.1% 21.4% (New Quest acquired by TPG) 9.2% Slide 32
Slide 33: Independently Supervised: Eminent Board of Directors
Independently Supervised : Eminent Board of Directors Satyananda Mishra – S. Karuppasamy - Abhijit Sen - Karnam Sekar – Hemant Bhargava – Non-Executive Chairman Chairman, Compliance Chairman, Audit Committee Independent Director Independent Director Ex-Chairman, MCX, Ex-CIC, GOI, Committee Ex-CFO, C
Slide 34: Professionally Managed: 190+ years of cumulative experience
Professionally Managed : 190+ years of cumulative experience Shachindra Nath - Amit Mande - Anuj Pandey - Kishore Lodha - Sunil Lotke – Vice Chairman & Managing Chief Revenue Officer Chief Risk Officer Chief Financial Officer Chief Legal & Compliance Director 20+ Years of Experience 20+ Years of Exp
Slide 35: AUM & Disbursement Trend
AUM & Disbursement Trend Slide 35
Slide 36: Loan Origination (Segment wise M-o-M)
Loan Origination (Segment wise M-o-M) Amount in INR Cr 229 267 246 321 165 244 203 174 328 415 364 328 408 Net Disbursement 623 579 64 538 59 492 49 460 51 73 56 414 54 39 38 362 43 229 87 345 199 320 319 12 321 49 198 288 34 48 29 183 62 255 23 65 25 162 51 15 44 20 120 114 46 16 46 74 10 143 31 70
Slide 37: AUM Trend (Segment wise M-o-M)
AUM Trend (Segment wise M-o-M) 126% 20% 4,375 4,099 3,885 718 3,656 690 3,335 663 620 465 2,969 3,061 422 2,834 585 391 397 2,589 2,696 361 538 382 535 363 240 2,335 543 315 548 356 214 2,140 523 253 272 322 187 1,933 209 170 454 189 287 289 141 416 183 286 120 1,261 150 259 291 106 1,145 375 92 1,0
Slide 38: AUM & Loan Origination Trend (Q-o-Q)
AUM & Loan Origination Trend (Q-o-Q) AUM – INR Cr (Q-o-Q) Gross Loans Originated / Disbursed – INR Cr (Q-o-Q) 789 1,053 962 1,359 1,653 1,933 2,589 2,969 3,656 4,375 12% 16% 8% 11% 11% 17% 9% 9% 10% 37% 18% 5% 10% 19% 11% 20% 9% 37% 5% 7% 8% 10% 10% 29% 25% 4% 7% 19% 7% 27% 3% 27% 39% 11% 5% 7% 26%
Slide 39: UGRO Inception and Journey
UGRO Inception and Journey Slide 39
Slide 40: UGRO Capital - Overview
UGRO Capital - Overview About UGRO Vision / Mission Our Thesis • U GRO Capital limited is a BSE and NSE listed, Mission: Problem of MSMEs can be solved by technology focused, small business lending platform. ‘To Solve the Unsolved’ • Bringing homogeneity to a non-homogeneous Sector • Built on 5-pill
Slide 41: UGRO Capital – Journey since inception
UGRO Capital – Journey since inception 4,375 Cr 1,375 Cr 861 Cr 79 Cr Raised Started Capital Disbursing Mar’19 Mar’20 Jun’21 Sep’22 Jul’18 Jan’19 Growth Covid – 19 Cautious Covid – 19 Resuming Growth Stage Operational Shut Resumption of Wave 2 Stage down Operations Operational Slow (Apr – Jun) Down
Slide 42: IT Architecture
GRO IT Architecture Slide 42
Slide 43: Platforms further integrated with rich data enrichment layer
Platforms further integrated with rich data enrichment layer Branch Channel Partnership & Alliances Sourcing Channel Supply Chain Financing Partnership & Alliances Digital Direct (Prime + Micro) Marketplace A Plug and Play Partnership & GRO-Plus & Micro GRO Direct Distribution Module Alliances API F
Slide 44: UGRO Capital Limited Registered Office Address
UGRO CAPITAL LIMITED Registered Office Address: Equinox Business Park, Tower 3, 4th Floor, LBS Road, Kurla (West), Mumbai - 400070 CIN: L67120MH1993PLC070739 E-mail: investorrelations@ugrocapital.com | Website: www.ugrocapital.com Slide 44